The embattled First National Bank of Boston received a show of support from shareholders at its annual meeting Thursday, despite its surprise announcement that it failed to tell the government about an additional $110 million in international cash transactions.
Chairman William L. Brown told shareholders that the bank, which pleaded guilty in February to not reporting $1.2 billion in cash transactions with Swiss banks, did not report $110 million worth of cash transactions with banks in Canada and Haiti.
Brown said the bank, the flagship unit of Bank of Boston Corp., notified the federal government of the latest unreported transactions Wednesday and did not know whether it would be fined a second time. The bank paid a $500,000 fine for the Swiss reporting violations.
May Levy Another Fine
Patrick Walsh, the federal attorney who has handled the Bank of Boston case, said the government will levy another fine if it learns that the bank did not report the transactions to intentionally avoid the law.
"It really depends on where the investigation goes," he said. "If it was just a systems error, there will be no other criminal charges."
At a news conference after the shareholders' meeting, Brown said: "We made a mistake. We should have reported. All we can do is tell you the truth."
He attributed the violations to an administrative oversight, the same explanation given for the $1.2-billion problem.
Brown said that he knew few details about the $110 million but added that the failure to report the money was under an internal investigation.
Bank auditors discovered the unreported $110 million recently, Brown said, while they were checking into federal law compliance at all Bank of Boston branches and subsidiaries.
Bank officials said the unreported money represents 1,200 transactions conducted between 1980 and 1984. They said 800 of the transactions, about $20 million worth, were between Canadian banks and the Casco-Northern Bank in Maine, a subsidiary purchased in 1984.
About $73 million of the total represents 59 transactions between the Central Bank of Haiti and the Bank of Boston International South in Miami, the officials said, and the rest of the unreported money was handled by foreign tellers in the Boston headquarters.